Japan falls back into trade deficit in April

TatsuoIto

TOKYO--Japan fell back into a trade deficit in April, although the result was much better than forecast, as a jump in exports to the U.S. helped mitigate an increase crude oil import volumes.

A month after recording its first trade surplus in nearly three years, the world's third largest economy logged a Yen53.4 billion ($439 million) deficit, data from the Ministry of Finance showed Monday. Economists polled by The Wall Street Journal and the Nikkei had predicted a Yen325 billion deficit.

Exports grew 8.0% on year, while imports fell 4.2%. The ministry said the overall deficit was the narrowest since March 2009.

A plunge in global oil prices since last summer has remained a factor curbing the value of the country's overall import bill. But an increase in crude import volumes in April outweighed Japan's outbound shipments of goods including cars and semiconductors.

The value of crude oil imports fell 34.6% from a year earlier compared with a 51% decline last month, while exports of cars grew only 7.2% on year compared with a 10.5% increase last month.

The overall volume of imports increased 0.1% from a year earlier, while exports increased 1.8%.

A ministry official briefing reporters on the data noted that Japanese car exports to China fell about 50% during the month likely due to a slowdown in the Chinese economy.

While they expect the trade balance to improve on the back of a rising exports and as oil and other commodity prices stay weak, economists predict the trade balance to stay in the red in the coming months.

"If the exchange rate starts to weaken again in the second half of the year as we expect, crude oil imports will become more expensive again, soon," Capital Economics wrote in a note.

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